Trading options involves unique risks and
is not suitable for all investors.

Spreads, condors, butterflies, straddles, and other complex, multiple-leg
option strategies can entail substantial
transaction costs, including multiple
commissions, which may impact any
potential return. These are advanced
option strategies and often involve greater risk, and more complex risk, than basic
options trades. Be aware that assignment
on short option strategies discussed in
this article could lead to unwanted long
or short positions on the underlying
security.

Maximum potential reward for a long
put is limited by the amount that the
underlying stock can fall. Should the long
put position expire worthless, the entire
cost of the put position would be lost.

When trading short option strategies,there is a risk in getting assigned earlyon the options sold, even if they go in themoney by $0.01, obligating you to delivershares you don’t own (in the case of ashort call) or purchase shares (in the caseof a short put).

The risk of loss on an uncovered short
call option position is potentially unlimited since there is no limit to the price
increase of the underlying security. Option
writing as an investment strategy is absolutely inappropriate for anyone who does
not fully understand the nature and extent
of the risks involved.

Short naked put and cash-secured put
strategies include a high risk of purchasing the corresponding stock at the strike
price when the market price of the stock
will likely be lower.

Short naked option strategies involve
the highest amount of risk and are only
appropriate for traders with the highest
risk tolerance.

A covered call strategy can limit the
upside potential of the underlying stock
position, as the stock would likely be called
away in the event of a substantial stock
price increase. Additionally, any downside
protection provided to the related stock position is limited to the premium received.

(Short options can be assigned at any time
up to expiration regardless of the in-the-money amount.)

3FUTURES

Futures trading is not suitable for all
investors as the risk of loss in trading
futures is substantial. Futures accounts
are not protected by the Securities
Investor Protection Corporation (SIPC).

Futures and futures options trading
is speculative, and is not suitable for
all investors. Please read the Risk
Disclosure for Futures and Options
prior to trading futures products
( https://www.tdameritrade.com/retail-
en_us/resources/pdf/TDA631.pdf ).

IMPORTANT INFORMATION YOU NEED TO KNOW

1

GENERAL DISCLAIMER

The information contained in this article is not intended to be investment advice and is
for illustrative purposes only. Be sure to understand all risks involved with each strategy,
including commission costs, before attempting to place any trade. Clients must consider
all relevant risk factors, including their own personal financial situations, before trading.

Past performance of a security or strategy does not guarantee future results or success.

Transaction costs (commissions and other fees) are important factors and should be
considered when evaluating any options trade. Options are not suitable for all investors as
the special risks inherent to options trading may expose investors to potentially rapid and
substantial losses. Options trading subject to TD Ameritrade review and approval. Please
read Characteristics and Risks of Standardized Options (http://www.optionsclearing.
com/about/publications/character-risks.jsp) before investing in options.